Amendment

In Oxford Gene Technology Ltd v Affymetrix, Inc et al, a case which seems to be returning to the Court of Appeal like clockwork, without as yet having reached the full trial at first instance, the Court of Appeal has revisited the law as regards a patentee's right to amend its patent in the course of infringement proceedings. Since in almost every case the defendant in such an action makes a counterclaim for the revocation of the patent on grounds of invalidity, the need to make an amendment of one sort or another arises fairly frequently.

The statutory law on this point is found in sections 63 and 75 of the Patents Act 1977, which itself was passed to bring the law of the United Kingdom into approximation with the European Patents Convention ("EPC"). Section 63 deals with the amendment of a partially valid patent which has some valid claims as well as some which are invalid. In these circumstances, the court will revoke the invalid claims while leaving the valid claims intact and, if appropriate, granting relief in respect of their infringement. Thus far, the Patents Act is clearly applying the requirements of Article 138 of the EPC. Section 75, on the other hand, addresses the situation where none of the claims may be valid as they stand but nonetheless the patent as granted does include a patentable invention which could be appropriately protected by some amendment - which may be relatively minor - to one or more claims. This position may arise where, for example, the patent as granted is of broad scope and a piece of prior art is later uncovered which overlaps with the patent at one edge.

In this case, the Court can permit the patent to be amended, but whether or not the Court does so in any given instance is a matter of discretion. Although the EPC specifies only a list of particular reasons which may lead to revocation of a patent, the existence of a discretion means that in the English courts entirely extraneous factors relating to whether the patentee has conducted itself in good faith and with 'clean hands' may affect whether the patent is permitted to be validated by amendment, or simply revoked in its entirety. The sort of factors which the Court will consider include delay by the patentee in seeking amendment once the need to amend was known; or whether the patentee has attempted to enforce or assert the patent while knowing it to be invalid.

English patent practice in these circumstances has been largely settled for many years, since the decision of Aldous J (as he then was) in Bonzel v Intervention Ltd ([1991] RPC 231). In that case, the judge stated that the onus was on the patentee to put before the court all matters which might be relevant to the exercise of the Court's discretion, including matters which were discussed in privileged correspondence with the patentee's patent agents or other legal advisers. If the patentee failed to disclose such documents, relying upon their privileged nature, then the Court could draw from that failure an adverse inference against the patentee, and potentially refuse the exercise of the discretion. This understanding of the law was in apparent contravention of Wentworth v Lloyd, a decision of the House of Lords from 1864, which stated that no adverse inference could be drawn from the maintenance of privilege. Nevertheless, it was clearly reflected in a decision of the present senior Patents judge, Laddie J, in the case of Kimberley-Clark v Proctor & Gamble (reported in WIPR [ ] 1999), and in the order for disclosure made by the same judge in the Oxford Gene case. This order stated that Oxford Gene Technology ("OGT"), should give disclosure of

"all documents relevant to the court's discretion to permit or refuse amendments of the patent in suit in accordance with the claimant's obligation of utmost good faith to put all relevant matters before the court."

Accordingly, OGT gave disclosure of its privileged documents, but attempted to restrict their disclosure to Affymetrix' English legal advisers only, and not to Affymetrix itself. There followed a dispute as to whether or not this limit was permissible (see WIPR October 2000), in which Pumfrey J ruled that privilege had been waived but that the Court was still entitled to limit further disclosure because of the confidential nature of the documents.

At appeal, the arguments focussed on whether or not a limited waiver of privilege, such as OGT claimed to have made, is possible under English law. The case law on this issue is limited, mainly dealing with two unrelated questions. The first is whether a waiver of privilege in criminal proceedings amounts to a waiver in later civil proceedings. The second deals with the procedure for assessing how much the winning party is to be awarded in legal costs - a process which requires the Costs Judge to review the entire conduct of the case and form a view as to whether particular expenses were reasonably incurred or time reasonably spent. This necessarily includes reviewing privileged correspondence and has been held not to amount to a waiver of privilege in the proceedings as a whole.

The Court of Appeal concluded that, contrary to the long-accepted understanding of the law as set out in Bonzel, the obligation to disclose material facts does not require the disclosure of documents. The decision to waive privilege is one for the patentee and not for the court. In future patent amendment applications, therefore, the likelihood is that disclosure of privileged materials will be very much narrower if any such documents are disclosed at all.

Where, as in this case, a waiver had purportedly been made, it was for the court to determine whether as a matter of fact privilege had been waived, and that it should do so upon principles of justice and fairness. In order to determine this on the facts of the case before it, the Court reviewed the wording not only of the List which had been served but also of the surrounding correspondence between the parties' solicitors. This, the Court concluded, showed that OGT had never intended to disclose the documents to its adversary, Affymetrix, itself: the disclosure to the English legal team did no more than explore whether it was possible to agree that OGT's confidential and privileged documents could be disclosed to their opposing lawyers on a strictly confidential basis. No agreement was ever reached. The Court therefore held that in fact privilege had never been waived at all, stating that 'to conclude that what happened mounted to a general waiver of privilege would be unjust'.

In the event, therefore, Affymetrix' application for wider disclosure was moot. The Court did, however, remark that if there had been a waiver of privilege then wider disclosure should have been permitted. Although the judge had correctly stated the law on this question, Aldous LJ considered that the judge should have given more weight to Affymetrix' solicitors' evidence as to the difficulties of conducting the case without their clients' input on the amendment issues. He also concurred with Affymetrix' view that if they had been disclosed then, contrary to Pumfrey J's order at first instance, the documents should have been available for reference in the infringement and revocation proceedings of which the amendment application to which they related formed a part.

First published in WIPR in December 2000.

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